Latin American Energy Integration Runs into Short Circuits

Energy integration efforts in Latin America have been made in fits and starts, even though many clearly understand that the only way to solve the region’s energy shortages and high costs is by working together.

Experts who spoke to IPS agreed that the main difficulties in achieving energy integration lie in the differences between national energy supply systems. In the region there are countries with centralised state management and others with mixed public-private systems.

Other factors that affect integration are differences in fuel prices, uncertain availability of natural gas supplies, and socio-environmental conflicts over major energy projects such as mega-dams.

To move forward towards integration, they say, commercial and technical regulations must be adopted for a viable international market for electricity, to operate interconnected systems, harmonise national regulations, and coordinate planning for connected systems, in order to develop a regional market.

Common criteria for reliability standards, rationing priorities, and distribution of congestion pricing revenues also have to be defined.

Among the factors standing in the way of integration are a lack of political will and the privatisation of a number of major power production and distribution companies and oil companies since the 1990s.

At any rate, several bilateral or multilateral initiatives for interconnection have been studied, and some of them could be implemented.

Source: Marianela Jarroud | IPS News